Correlation Between SM Energy and Jupiter Green

Can any of the company-specific risk be diversified away by investing in both SM Energy and Jupiter Green at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SM Energy and Jupiter Green into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SM Energy Co and Jupiter Green Investment, you can compare the effects of market volatilities on SM Energy and Jupiter Green and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SM Energy with a short position of Jupiter Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Energy and Jupiter Green.

Diversification Opportunities for SM Energy and Jupiter Green

-0.12

Correlation Coefficient

SM Energy  Jupiter Green

Good diversification

The 3 months correlation between 0KZA and Jupiter is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SM Energy Co and Jupiter Green Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Green Investment and SM Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SM Energy Co are associated (or correlated) with Jupiter Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Green Investment has no effect on the direction of SM Energy i.e., SM Energy and Jupiter Green go up and down completely randomly.

Pair Corralation between SM Energy and Jupiter Green

Assuming the 90 days trading horizon SM Energy Co is expected to under-perform the Jupiter Green. In addition to that, SM Energy is 7.27 times more volatile than Jupiter Green Investment. It trades about -0.09 of its total potential returns per unit of risk. Jupiter Green Investment is currently generating about 0.2 per unit of volatility. If you would invest  23,400  in Jupiter Green Investment on December 22, 2024 and sell it today you would earn a total of  1,100  from holding Jupiter Green Investment or generate 4.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

SM Energy Co  vs.  Jupiter Green Investment

SM Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days SM Energy Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jupiter Green Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Green Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Jupiter Green is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SM Energy and Jupiter Green

The main advantage of trading using opposite SM Energy and Jupiter Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Energy position performs unexpectedly, Jupiter Green can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jupiter Green will offset losses from the drop in Jupiter Green's long position.

The idea behind SM Energy Co and Jupiter Green Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.